Deloitte Insights Video

Ecosystems, or communities of diverse participants who create greater value through sophisticated models of collaboration and competition, are complex and often confusing, but leaders who understand how to work within these dynamic and adaptive environments can attract passionate communities of participants and reap enhanced business value.

Core systems can be a jumping-off point for enterprise innovation, or the very thing that halts growth in its tracks. In this Tech Trends video, Mark White, CTO at Deloitte Consulting LLP, discusses the questions CIOs should ask themselves in pursuing the rebirth of core IT assets.

More organizations are turning to crisis simulations to test their ability to respond to unexpected events. When well-planned and executed, these exercises provide participants with a realistic sense of their roles and responsibilities during a crisis and help to reveal blind spots. Four organizations from different industries that have undertaken crisis simulations in recent years share lessons they’ve learned and benefits they’ve derived from the experience.

Related Deloitte Insights

Forgetting to create backup staffing plans for core project team members and failing to think through legacy data migration rank among the common mistakes HR organizations make when implementing new human capital management (HCM) systems. Executives who oversaw recent HCM systems implementations at Lee Memorial Health System, Bentley Systems, and Citrix Systems share how they addressed or avoided those mistakes.

Lured by the potential for significant cost savings and attractive discounts from vendors, CIOs of large enterprises are increasingly considering moving from on-premise to cloud-based email. But in their eagerness to save money, they risk overlooking four important considerations that could end up costing them more.

As outsourcing’s popularity soars among global companies, vendor management complexity and the prospect of increased regulation preoccupy CIOs and other executives. This infographic illustrates these and other findings from Deloitte’s 2014 Global Outsourcing and Insourcing Survey.

About this blog

About Deloitte Insights

Deloitte Insights for CIOs couples broad business insights with deep technical knowledge to help executives drive business and technology strategy, support business transformation, and enhance growth and productivity. Through fact-based research, technology perspectives and analyses, case studies and more, Deloitte Insights for CIOs informs the essential conversations in global, technology-led organizations.

The Rise of the Cloud Supermarket

Just a few decades ago, it was common for American shoppers to buy meat from the butcher, tools from the local hardware store, and produce from a green grocer down the street. Today, shoppers in most communities will likely purchase these same items—plus clothing, medicine, and a seemingly limitless variety of other products and services—from a single “big box” supermarket on the edge of town.

The same transformational forces that drove consolidation in the retail industry are now driving fundamental change in the cloud services sector. According to Chris Weitz, a director at Deloitte Consulting LLP who specializes in cloud technologies, companies are now buying cloud services from so many different vendors that managing supplier relationships and contracts is becoming challenging. “For this reason, enterprise buyers increasingly want more services from fewer vendors,” says Weitz. “In response, some vendors are moving beyond point solutions and are now taking a variety of sophisticated, integrated products to market. In effect, these providers are becoming cloud supermarkets.”

Weitz sees this transformation as a long-term trend. “The transition from a market of many small vendors to one dominated by a handful of mega-vendors will likely be neither clean nor quick,” he says. “But this is an inevitable, unstoppable phenomenon that occurs as markets mature, and it is clearly happening right now in the cloud services sector.”

Fueling this trend is the cloud’s growing popularity with business. According to International Data Corporation (IDC), worldwide spending on public IT cloud services topped $40 billion in 2012 and may approach $100 billion in 2016. Moreover, IDC forecasts that from 2012 to 2016, public IT cloud services will enjoy a compound annual growth rate of 26.4 percent—five times that of the IT industry overall—as companies accelerate their shift to the cloud services model for IT consumption.¹

Weitz says in the near future, successful cloud services vendors will likely broker diverse offerings that feature their own services bundled loosely with those of other vendors. The price for bundled offerings could go up a bit, but these integrated products would include more services—consolidation, integration, and aggregation services will likely be part of the package.

“As the cloud market consolidates, primary sellers may acquire the providers whose services they are bundling, or they may offer these services themselves,” says Weitz. “These major ‘supermarket’ players will likely broaden their offerings and move into new markets. Meanwhile, smaller providers whose products are brokered by large aggregators will be able to focus on providing specialized cloud services, rather than on maintaining a sophisticated retail operation.”

Weitz says enterprise customers will prefer “one-stop shopping” for cloud services—which may lead to fewer vendor relationships. “The product and service options will be more clearly defined, and the chaotic nature of the early market will give way to something more organized and stratified.”

Brokers offering specialized cloud services may need to operate outside the reach of the large aggregators. “There will likely be a vibrant niche market that might be local, regional or industry specific,” says Weitz. “Boutique brokers will likely maintain strong presences there.”

Weitz says that as consolidation proceeds in the cloud services market, CIOs should consider examining the services they now source externally, and try to envision a preferred structure that could provide the manageability, efficiency, and agility they need to address future strategic and operational needs. “As the market evolves, a smaller number of vendors will likely be able to offer that structure.”

The cloud market’s current transition may seem familiar to some CIOs. “This is where ERP was 20 years ago,” says Weitz. “Companies used to license 15 different pieces of software to run their back offices. Then integrated ERP suites appeared, and they eventually only had to license one solution.”